Coronavirus: apprehensive shoppers put auto sales in tailspin

Ahead of Gudi Padva festival on March 25, auto dealers in
the state expect no major improvement in the depressed market sentiment. The
festival is just two days away but with the overall market in a tailspin Goan
auto dealers are in a doleful mood.

Coronavirus
coming on top of the ongoing demand slowdown witnessed in the auto industry is
hit local dealers badly. Dealers said
that they are in a worst situation as sales have nosedived in the face of
residents trying to protect themselves from the ongoing coronavirus rather than
think of purchasing automobiles. Inquiries from customer are few and bookings
are fewer still, according to local dealers who say that, January- February
were months of poor demand and March looks even bad.

“The market is
sluggish. People are not coming out of their homes. Banks are slow. The entire
industry is in lockdown mode. Our walk-ins have plummeted. Customers are not
coming to the showroom. We are facing tough times,” said Ashok Sapra, dealer
Yamaha two-wheeler and Tata Motors.

“Gudi Padva
festival in the state is important as the festival is auspicious for purchasing
new things. Residents move into new homes and buy new vehicles on the day. But
with the festival coming in the midst of a crucial week for the dreaded
coronavirus diseases we are really worried,” said a dealer.

“Coronavirus has
worsened the situation in the automobile industry,” said Vallabh Kunkoliencar, secretary Goa Automobile
Dealers Association (GADA). “We were
already facing slow down but this situation is the worst. Our overheads are
unavoidable. We have salaries to pay even if we don’t have sales. Salaries in automobile dealerships are huge.
Each dealership on an average pays Rs 25 lakh to Rs 35 lakh a month on
salaries,” said Kunkoliencar worriedly.

Automobile
dealers are actually passing through three crucial situations, viz. the demand
slowdown, coronavirus and the switch to BS6 vehicles. Kunkoliencar said that, of the three hurdles
facing the trade, the coronavirus disease is the most terrible. He indicated
that, the transition to BS6 from BS4 vehicles is not a major problem for

Goan dealers.

“In the rest of
the country BS 4 inventory is a big problem but in Goa the problem is not so
much. Most of the dealers have exhausted their stock of BS 4 vehicles. Hardly
250 vehicles are there in the market. Before March 31 2020, we expect even that
to go,” said Kunkolienkar.

For the inventory
to clear, dealers are hoping for a slight pickup in buying due to attractive
discounts on offer on BS 4 two-wheeler and four-wheelers. “My two-wheeler
inventory is almost over but we are offering discounts on passenger and
commercial vehicles,” said Sapra.

According to the
Indian Council of Medical Research the country is in the second stage of
transmission of the coronavirus infection, viz local transmission. The third
stage is of community transmission but the government is trying to avoid that
by stringent social distancing as well as complete lockdown of all services.

In Goa the
government has stopped inter-state transport services, closed malls,
restaurants, schools, colleges and asked residents to stay at home. Companies
are asked to make employees work from home. All this is extremely alarming for
local auto dealers who are hoping for a small spurt in month-end sales which
marks the end of the financial year 2019-20.

In 2019 due to
the demand slowdown caused by slowdown in the economy the automobile industry
across all states went through turbulent times and witnessed 30-40 per cent
plunge in sales. Goan dealers also faced
a similar situation as vehicle sales dropped by 25-30 per cent. Just the
October- December months of 2019 were good as the state government lowered road
tax to boost the sentiments, according to dealers.